Today, TRA will be testifying on House Bill 2101 - Food and Beverage Certificate Legislation sponsored by Representative John Frullo in the House Licensing Committee.
Currently, the Texas Alcohol Code allows a restaurant with a mixed beverage permit to obtain a food and beverage certificate if the restaurant does not have mixed beverage sales greater than 50% of its gross receipts, has hours of food operation during all hours of alcohol service, and multiple entrée items available during food service.
A food and beverage certificate is vital in many jurisdictions where local option elections have been held, allowing mixed beverages to be sold in restaurants. Since 2000, there have been 278 local option elections allowing for mixed beverage service in restaurants with 199 successful elections. This has created a significant positive economic impact for previously dry jurisdictions where many restaurants now operate and provide communities a more diverse choice of restaurants.
With the sharp rise in alcohol prices and customers’ willingness to pay more for premium brand alcohol and craft beers, however, for many the total amount of alcohol gross receipts is nearing the 50% threshold. Restaurants with a food and beverage certificate that surpass the 50% alcohol threshold may lose their mixed beverage permit and their ability to sell mixed beverages. This will cause a significant negative economic impact on businesses and communities that enjoy having restaurants that serve mixed beverages.
TRA is supporting amendments to the Texas Alcohol Beverage Code to address inconsistencies relating to food and beverage certificates and rising alcohol prices.
CSHB 2101 will do the following:
• Increase the alcohol sales threshold to 60% of total sales on the premises.
• Adopt uniform language on alcohol vs. non-alcohol sales calculation for all types of food and beverage permits and transfer the calculation to TABC to avoid confusion in calculations.
• Include due process language to allow a permittee to submit additional information if a food and beverage certificate is not renewed and to allow TABC to deny renewal of a food and beverage certificate at any time if permittee is in violation of the new threshold.
• Continue to allow concessionaires in public entertainment venues, sports stadiums, and convention to operate without meeting food and beverage certificate requirements.
• Maintain the 1,000 feet rule relating to bars near public schools.
TRA will continue to provide updates as we monitor the progress of HB 2101. If you have any questions or concerns, email TRA's General Counsel, Kenneth Besserman.